7 ms·

Here's an article from 2014 that explains this "loophole" https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postal-service-is-losing-millions-a-ye

Here's an article from 2014 that explains this "loophole" https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postal-service-is-losing-millions-a-year-to-help-you-buy-cheap-stuff-from-china/ https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...

scholia 11y ago
Good piece. Thanks for the link.
tomp 11y ago
From the article: > All this should be a reminder that any trade deal has winners and losers and unintended consequences. Obviously, whoever you subsidize is a winner. If you're setting up barriers to trade (e.g. tariffs), foreign sellers/manufacturers lose. If you're subsidizing imports, domestic sellers/manufacturers lose. Why can't we just not subsidize anyone?! Free trade is supposed to be just that, free. Instead, we have the TPP & TTIP, which will create yet new injustices and new sets of winners and losers.
- mey 11y ago
  Free trade requires both sides to be equally free. Tariffs are one of the defenses against another nation massively subsidizing an export. Getting all countries to play fair (in this case neither subsidizing or taxing) isn't going to happen. You also run into the interesting situation of what is a subsidy that impacts exports/imports? For example, post great depression america started tax subsidy for farmers to ensure a stable food supply. That hurts imports of the same product. Another interesting example is minimum wage, it makes imports more attractive, as domestic labor costs go up. Not getting into what is right/wrong, simply that economic incentives are not uniform and may be defensive. Hence international trade tries to deal with that via accords, treaties, tariffs etc. Not to mention to that tariffs are a source of revenue for the respective government.
  - jessriedel 11y ago
    The unilateral benefits of free trade does not require both sides to be equally free. When China allegedly subsidizes (a thing that happens much less frequently then claimed by industries seeking protection), that means China is sending us unusually cheap stuff. Yes, it's possible that this is a highly coordinated monopoly-building strategy, but much more likely is that China has internal reasons for doing this (such as building political stability, or internal regulatory capture by their industry) that don't have negative impacts on the US. The purpose of these tariff-reducing trade treaties is much more about gathering political coalitions to break through public-choice failures resulting in (overall welfare reducing) protectionist policies taken by each side.
  - astrostl 11y ago
    Hong Kong practices unilateral free trade, and it sure hasn't seemed to hurt them.
    - robryan 11y ago
      Assuming you benefit greatly from free trade. If everyone operated with completely free trade there would be big winners and big losers.
      - cturner 11y ago
        It is not a zero sum game. free trade lets specialisation scale better, and there are outcomes where everyone wins.
    - snowwrestler 11y ago
      That is because Hong Kong makes a living primarily as a place where trades are executed, not as a significant trader itself. Hong Kong does not have large supplies of natural resources, huge manufacturing industries, or millions of acres producing agricultural exports. Pretty much the only economy they have is hosting relationships and taking a cut, so they have no economic reason to erect trade barriers.
- goda90 11y ago
  Labor and environmental laws. They make manufacturing more expensive in the progressive countries that have them. Then they can't compete without tariffs or subsidies.
  - tomp 11y ago
    Right, but then you should set up specific restrictions for very specific circumstances. E.g. if a company in China is using coal power (that would be below EU/US standards of pollution), you apply extra "fair-market fees" to their imports. However, you also allow for "certification" - if a company proves they comply to the stricter laws, they don't need to pay the fee.
- lmm 11y ago
  So what would you replace the UPU with? Bilateral agreements between every pair of national carriers?
  - tomp 11y ago
    No. I would replace it with no agreements; everyone pays the cost of sending their packets. Markets => competition => lower price.

scholia 11y ago

Good piece. Thanks for the link.

tomp 11y ago

From the article: > All this should be a reminder that any trade deal has winners and losers and unintended consequences. Obviously, whoever you subsidize is a winner. If you're setting up barriers to trade (e.g. tariffs), foreign sellers/manufacturers lose. If you're subsidizing imports, domestic sellers/manufacturers lose. Why can't we just not subsidize anyone?! Free trade is supposed to be just that, free. Instead, we have the TPP & TTIP, which will create yet new injustices and new sets of winners and losers.

mey 11y ago
Free trade requires both sides to be equally free. Tariffs are one of the defenses against another nation massively subsidizing an export. Getting all countries to play fair (in this case neither subsidizing or taxing) isn't going to happen. You also run into the interesting situation of what is a subsidy that impacts exports/imports? For example, post great depression america started tax subsidy for farmers to ensure a stable food supply. That hurts imports of the same product. Another interesting example is minimum wage, it makes imports more attractive, as domestic labor costs go up. Not getting into what is right/wrong, simply that economic incentives are not uniform and may be defensive. Hence international trade tries to deal with that via accords, treaties, tariffs etc. Not to mention to that tariffs are a source of revenue for the respective government.
- jessriedel 11y ago
  The unilateral benefits of free trade does not require both sides to be equally free. When China allegedly subsidizes (a thing that happens much less frequently then claimed by industries seeking protection), that means China is sending us unusually cheap stuff. Yes, it's possible that this is a highly coordinated monopoly-building strategy, but much more likely is that China has internal reasons for doing this (such as building political stability, or internal regulatory capture by their industry) that don't have negative impacts on the US. The purpose of these tariff-reducing trade treaties is much more about gathering political coalitions to break through public-choice failures resulting in (overall welfare reducing) protectionist policies taken by each side.
- astrostl 11y ago
  Hong Kong practices unilateral free trade, and it sure hasn't seemed to hurt them.
  - robryan 11y ago
    Assuming you benefit greatly from free trade. If everyone operated with completely free trade there would be big winners and big losers.
    - cturner 11y ago
      It is not a zero sum game. free trade lets specialisation scale better, and there are outcomes where everyone wins.
  - snowwrestler 11y ago
    That is because Hong Kong makes a living primarily as a place where trades are executed, not as a significant trader itself. Hong Kong does not have large supplies of natural resources, huge manufacturing industries, or millions of acres producing agricultural exports. Pretty much the only economy they have is hosting relationships and taking a cut, so they have no economic reason to erect trade barriers.
goda90 11y ago
Labor and environmental laws. They make manufacturing more expensive in the progressive countries that have them. Then they can't compete without tariffs or subsidies.
- tomp 11y ago
  Right, but then you should set up specific restrictions for very specific circumstances. E.g. if a company in China is using coal power (that would be below EU/US standards of pollution), you apply extra "fair-market fees" to their imports. However, you also allow for "certification" - if a company proves they comply to the stricter laws, they don't need to pay the fee.
lmm 11y ago
So what would you replace the UPU with? Bilateral agreements between every pair of national carriers?
- tomp 11y ago
  No. I would replace it with no agreements; everyone pays the cost of sending their packets. Markets => competition => lower price.